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Credit Search?

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  • Credit Search?

    Evening all,

    Had an offer accepted on a house I want to buy.

    I need an additional £6k to reach the 20% deposit threshold and thus save me hundreds of pounds a month in interest payments on my mortgage. I've been accepted for the 80% mortgage so now need to find the funds, I could ask my parents to get a loan (was think of a simple 2yr Tesco personal loan), but I'd rather get it in my own name if possible.

    My question is, I have been accepted for the mortgage (they have done a credit search), before they release the funds are they likely to check my credit again and see if I have taken another loan since the mortgage application started? I've checked on the Tesco web-site and they are happy to lend me £6k even with the mortgage amounts I have agreed with the Bank.

    Any advice gratefully received.


  • #2
    Sorry I cant help but have just found this forum while wanting the answer to a very similar question!
    We are selling our house and buying another and have Mortgage offer, due to exchange in the next week I hope.

    My question is much the same as I have decided to get my finances in order and have realised I could consolidate my existing personal loan and credit cards and be paying considerably less than I am (all of which the mortgage company is aware of) but not sure if I have to wait til we actually complete? will there be additional credit checks after a mortgage offer is made?

    Sorry to piggy back your thread!


    • #3
      Don't worry about stealing my thread.

      I think the answer is that generally speaking when you have your 'written' mortgage offer that no further credit check's are done.

      Hopefully someone who actually knows the answer will be able to comment shortly...



      • #4
        Dan, as you may see of some other posts added by me today I have only just joined this forum so apologies if this info is redundant.

        you're right that generally speaking, you are not credit searched again after mortgage offer. if however your mortgage offer were to expire - probelms with the property chain end up drawing out the purchase - the lender has the right to re-search you and this could put a spanner in the works.

        be mindful of the questions at app stage "what is the soruce of deposit?" if you answer own funds/savings etc and you get caught out re' the loan, you could end up struggling to get a mortgage.

        Hopefully you've already got this issue sorted now.



        • #5
          I'm in a similar situation too. Had an offer accepted for a property around 3 months ago but I'm still short of funds to raise the full deposit. Desperately trying to gather the funds from friends and family, but its looking like I'll still be around 8k short of what I need. I hope to raise the funds within the mortgage offer expiration period to avoid the lender possibly doing another credit check!

          Taking out a loan looks to be the only other way to make up the numbers ? Obviously the loan company will do a credit check. Does anyone know if the loan company will take notice that I could be topping up for a deposit on a property, or is this nothing to be concerned about?

          Slough Rooms


          • #6
            Applying for credit between applying for and drawing a mortgage could result in mortgage fraud if the lender is not notified so that they can re-assess the lending proposition that they are about to enter into.

            It is highly likely that the terms of the mortgage offer that you have received specifically requests that you notify the lender of any material change in circumstances prior to drawing of funds. If you don't comply with this then you will have breached the contract.

            It is probably unlikely that a new credit check will be conducted, but if it is, and you may not necessarily be informed of it happening, then you could be in for a difficult time.

            It would be significantly safer to discuss this with your mortgage adviser first to determine whether being honest with the lender is likely to jeopardise your chances of obtaining the mortgage. You may be pleasantly surprised. So long as you still pass the lender's affordability model when they take the new loan payments into account you should be ok.

            If you find that it is unlikely that the lender would approve the mortgage once you also have the loan then think very carefully about proceeding. Lender's affordability checks are there to prevent borrowers getting into financial difficulty and to protect you from future problems. In the current economic climate you need to do everything possible to keep your credit record clean else borrowing will become impossible.

            It's all very well being "smart" and finding loopholes in the system, but if you take a mortgage along with an unsecured loan and then get into trouble with payments you will regret it for years to come. Not so smart after all!!
            Property for sale in Torquay



            • #7
              Re: Credit Search?

              Good info IFA.